Economics

When an investment passes our first-screen at Meritage Funds, the first deep-dive we typically do is on the unit economics of the business. Unit economics are the fundamental financial building blocks of a business. If you can pin down the unit economics, you can determine contribution margins, break-even points and perform ROI calculations all of which […]

I spend a lot of time thinking about the future–both mine, and that of the world as a whole–and one of the things that has been on my mind is the need for us to do things differently. A recent longform piece in New York focused on the theory that the seeming inexorable economic progress […]

One of the most interesting areas in the conceptual discussion of the cloud is the economic impacts it can bring. The conversation is so much broader than just cost savings; there is a deep and complex series of discrete topics to look at relating to both costs and ROI relating to cloud. One of the […]

Plumbers and garbagemen make a good living despite their lack of PHP coding skills. That’s because they’re willing to do the necessary but unpleasant.Basic economics teaches us that prices are determined by supply and demand. Scarce skills like being …

Over the weekend, I finished reading the recently released Microsoft paper on the “Economics of the cloud”. As I head to Denver today for participating in the defrag panel on the impact of cloud computing in the enterprise irregulars track, I just…

When I was a teenager, I spent two summers working in a furniture manufacturing factory. The company, Steelcase, was (and still is) one of the largest office furniture manufacturers in the world. I worked in the binder-bin plant – a binder-bin is the cabinet that mounts on the back of your desk at about eye-level. […]

One of the key selling point of SaaS is the pay as you go model. In fact, some people even consider this to be part of the very definition of cloud computing. Yesterday, Phil Wainewright wrote a post about SaaS vendors selling multi-year contracts. He quotes a talk given by CEO of Workbooks.com, John Cheney, […]

My kids love the book “Leo the Late Bloomer”. As the story goes, Leo was a tiger cub who hadn’t quite hit his stride yet. Leo couldn’t do anything right. He couldn’t read. He couldn’t write. He was a sloppy eater… Leo’s father, playing the classic fatherly role, was very concerned. He couldn’t figure out what was wrong with […]

A conversation with the CEO of a SaaS company today reminded me of the importance of the rule of 78s. What is this “rule”, you ask. If you run a recurring revenue business, it is the most important number you have never heard of. Back to my conversation with the CEO. We were talking about the […]

I have recently been reading the book “Free: The Future of a Radical Price” by Chris Anderson. Well I am not actually reading it as I find I do not have time for reading books any more. These days I do all of my “book reading” using audio books from Audible.com. I find that by […]

One of the trends I’ve observed over the past several years is that more and more technology entrepreneurs are starting service-delivery business. By services businesses, I’m referring to the category of businesses that some venture investors refer to as technology-enabled services (“TES”). We at Meritage prefer the term network-enabled services (“NES”), which we think more […]

It is a late afternoon ritual for me to read the Meritage Minute, a daily briefing on key news events published by my colleague Heidi Longaberger. If you would like to receive The Minute, email Heidi. Yesterday’s briefing included an AlwaysOn piece titled “In Ten Years Will All Apps Be in the Cloud?” I’m not […]

Image by Getty Images via Daylife When the whole world was gloomy with onset of current recession, we (the members of cloud computing community) are happy about it in a way. Every single cloud computing evangelist will tell you that recession is good for cloud computing. The reason is obvious CapEx is converted into OpEX […]